A recently federal wage and hour lawsuit was filed on behalf of a strip
club dancer against The New Dollhouse, formerly the Crazy Horse, alleging
violations of minimum wage and overtime compensation laws. According to
the lawsuit, the club treats the dancers as independent contractors, and
not paid employees. The suit further alleges: “Over the past two
decades, the United States of Labor and courts across the country have
recognized that dancers are employees, not independent contractors, and,
accordingly, are entitled to protection under various state and federal
wage and hour laws.”
This case raises several significant issues in wage and hour law that affect
many industries, including when is a worker considered an employee vs.
an independent contractor? Federal labor law – the Fair Labor Standards
Act (FLSA) – provides that all employees must be paid minimum wage.
In addition to other protections, the FLSA also provides that all non-exempt
employees are entitled to overtime compensation at a rate of one and one-half
times your typical rate of pay for all time worked in excess of 40 hours
in any one work week.
If you have questions about your pay, or believe that you have not received
all the compensation you deserve, it’s a good idea to consult with
Atlanta overtime compensation attorney right away.
According to the lawsuit, the dancers were treated as independent contractors,
and additionally required to participate in a tip sharing arrangement
that left them making less than minimum wage.
Independent Contractor or Employee?
The general rule is that an individual is an independent contractor if
the payer has the right to control or direct only the result of the work
and not what will be done and how it will be done. On the other hand,
you are not an independent contractor if you perform services that can
be controlled by an employer (what will be done and how it will be done).
This applies even if the worker has some freedom. What matters is whether
the employer controls the details of how the services are performed.
Valid Tip Sharing Arrangement?
Also, the tip-sharing arrangement as set forth in the wage and hour lawsuit
is questionable. The suit alleges that the dancers were required to turn
over a significant portion of their pay including “house fee”
ranging from $25-$100 per shift, as well as a portion of their lap dance
fees calculated at $10 for one $30 song and $50 for a $300 30-minute private
dance. Dancers were also required to pay a portion of their tips to the
club’s “house mom,” the DJ and the valet. The suit alleges
that as the result of the tip sharing, which also includes paying for
business expenses, the dancers ended up receive little or no actual compensation
for hours of work.
Very specific rules exist concerning tip sharing. For example, tip-sharing
arrangements are generally only permissible if the employees sharing the
tips are other tipped employees or have somehow participated in serving
the customers who left the tips. Additionally valid tip-sharing arrangements
cannot require employees who actually receive tips to contribute a greater
percentage of their tips than is customary and reasonable. Whether the
percentage the dancers were required to contribute is reasonable is also
a significant issue.
This case raises numerous issues that are common across many lines of work.
For more information or if you have questions about your pay, please contact
Atlanta wage and hour attorneys at The Buckley Law Firm, LLC for an immediate consultation.